Capital - how much you possess that is worth more than your debts, Collateral - property pledged to assure repayment of a loan, Open-end Credit - agreement to lend the borrower an amount up to a stated limit. Can be used again and again as long as the balance does not exceed the limit. Example: use of credit cards - Discover, MasterCard, Visa (also known as revolving credit), Service Credit - agreement to have a service performed now and pay for it later. Example: utility bills like gas, water, electricity, Close-end Credit - loan for a specific amount that must be repaid in full or either through payments (installments). Example: car loan, home loan, Rooms 2 Go credit, Credit Score - a number that informs potential creditors of the likelihood that an individual will repay a debt; higher number is achieved by paying bills on time, paying total balances on credit cards, etc., Secured Loan - loan backed by assets, Unsecured Loan - loan not backed by assets, Truth in Lending Act - requires lenders to fully inform consumers about all costs of credit, Variable Interest Rate - interest that goes up and down with inflation and other economic indicators, Federal Housing Administration (FHA) Loan - loans to individuals who usually would not qualify for regular mortgage loans from banks (usually for 1st time borrowers, lower income, weaker credit scores), Redlining - form of discrimination by financial institutions in granting loans, insurance coverage, and other financial benefits, Chapter 7 Bankruptcy - liquidation form of bankruptcy for individuals, 60 days - time period to request a free credit report after being denied for job, Consumer Credit Counseling Services (CCCS) - non-profit agency that helps consumer's use credit wisely and by creating debt repayment plans for individuals in credit trouble, Predatory Lending - practice that imposes unfair or abusive loan terms on a borrower, Finance Charge (credit card) - cost of credit expressed in dollars, 7-10 years - time period a personal bankruptcy will appear on a person's credit report, Usury Law - a state law that sets a maximum interest rate that can be applied to charged to consumers, Chapter 11 Bankruptcy - reorganization form of bankruptcy for businesses, Chapter 13 Bankruptcy - reorganization form of bankruptcy for individuals, Pawn shop - business that buys personal items from consumers and makes high-interest loans to consumer's that use some form of collateral (example: trading in jewelry), Cash Advance - service provided by most credit card and charge card issuers; allows cardholders to withdraw cash, either through an ATM or over the counter at a bank or other financial agency, Consolidation Loan - take several outstanding debts and consolidate them into a single loan. In other words, you take out a new loan and use that loan to pay off your other debts, Minimum Payment - lowest dollar amount that must be paid on credit card balances and loans, Line of Credit - an established amount of credit that can be borrowed with no collateral; money is always available when you need it, Lien - a financial claim against property; it will mean you can't sell, transfer or refinance the property without paying the original debt plus applicable fees, Consumer Debt - debts owed as a result of purchasing goods and services, Creditworthiness - determination that an individual is a good credit risk, Character - how responsible you are in living up to agreements, often judged on credit history,

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